2018 Summerx Chapter 12 home work O eztomheducationcomhmtpx

-2018 Summerx Chapter 12 home work O ezto.mheducation.com/hm.tpx For the just completed year, Hanna Company had net income of $68,000. Balances in the company\'s current asset and current liability accounts at the beginning and end of the year were as follows: 31 Beginning of End of YearYear Current assets: Cash Accounts receivable Inventory Prepaid expenses $ 57,000 $80,000 $ 166,000 $ 196,000 $442,000 352,000 $ 11,500 13,500 Current liabilities: Accounts payable Accrued liabilities Income taxes payable s366,000 $ 386,000 9,000 12,000 $ 36,000 28,000 The Accumulated Depreciation account had total credits of $42,000 during the year. Hanna Company did not record any gains or losses during the year Required: Use the indirect method to determine the net cash provided by (or used in) operating activities for the year (List any deduction in cash and cash outflows as negative amounts.) Hanna Company Statement of Cash Flows Indirect Method (partial) Net income Adjustments to convert net income to a cash basis Net cash provided by (used in) operating activities

Solution

Hanna Company

Statement of Cash flows - Indirect method (Partial)

Net income

$ 68,000

Adjustments to convert net income to cash basis

Depreciation expense

$ 42,000.00

Decrease in accounts receivable

$ 30,000.00

Increase in inventories

-$ 90,000.00

Decrease in prepaid expenses

$ 2,000.00

Decrease in accounts payable

-$ 20,000.00

Decrease in accrued liabilties

-$ 3,000.00

Increase in income taxes payable

$ 8,000.00

-$ 31,000.00

Net cash provided by (used in) operatingg activities

$ 37,000.00

Hanna Company
Statement of Cash flows - Indirect method (Partial)
Net income		$ 68,000
Adjustments to convert net income to cash basis
Depreciation expense	$ 42,000.00
Decrease in accounts receivable	$ 30,000.00
Increase in inventories	-$ 90,000.00
Decrease in prepaid expenses	$ 2,000.00
Decrease in accounts payable	-$ 20,000.00
Decrease in accrued liabilties	-$ 3,000.00
Increase in income taxes payable	$ 8,000.00	-$ 31,000.00
Net cash provided by (used in) operatingg activities		$ 37,000.00